“All levels of government are facing significant budget challenges,” Harris’ senior counsel, Michael Troncoso, wrote to the lawmakers this week. “Financial problems faced by government must be resolved lawfully. To do otherwise would be irresponsible.”

Reed, however, said the attorney general seemed to misinterpret the proposal. He said the city isn’t attempting to use the Emergency Services Act or unilaterally alter contracts with employees, with whom the city is negotiating on the matter.

“They need to do a little more reviewing,” Reed said. “They don’t know what we’re trying to do.”

The mayor has acknowledged the legal risks in trying to reduce current employee pension benefits, but argues that the alternative is municipal bankruptcy or a greatly reduced workforce. And he believes the law allows room for what he’s proposed.

Reed was joined in his May 13 proposal by Vice Mayor Madison Nguyen and council members Rose Herrera and Sam Liccardo. A debate on the proposal initially set for Tuesday was rescheduled to Friday, with the meatiest matters — concerning the fiscal emergency declaration and ballot language — put off until at least August to allow more time for negotiations with police, firefighters and other unions.

Reed has said the move is needed to curb runaway pension costs, which have jumped from $63 million in 2000 to $255 million this year. They are expected to hit $400 million or more in five years.

The city has had to lay off employees, including police officers, to cover that bill, with the number of employees dropping from a high of 7,500 about a decade ago to about 5,300 today.

A combination of benefit increases, unrealistic assumptions and market losses have rendered the city’s retirement benefit system unsustainable, according to a city audit. With cost increases expected to force additional layoffs — San Jose’s 11th consecutive budget deficit next year already totals at least $78 million — city retirement officials have argued that the system is in a death spiral without enough employees to support it.

Some employee unions have argued that the pension problem is overblown. Police, firefighters and others have suggested alternatives such as an optional reduced pension benefit that current employees could choose to reduce their contribution toward retirement and raise their take-home pay. Those ideas are expected to be explored over the summer.

Reed has called for the council to discuss the fiscal emergency and ballot language Aug. 2, with an Oct. 31 deadline for union negotiations on pension and other benefit changes so that voters can decide on changes by March. Assuming voter approval, Reed hopes savings from the measures can be applied toward reducing next year’s deficit and layoffs.

The assemblymen, all of whom have enjoyed substantial union backing, had asked Harris whether the city could use a fiscal emergency as leverage to revoke benefit promises to current workers. Their joint letter last month drew some ribbing from San Jose officials such as Councilman Pete Constant, who noted the irony in Sacramento lawmakers, seemingly unable to patch their own deficits, lecturing a city on how to get its financial house in order.

Reed has argued that the city’s pension problem is too large to fix simply by lowering benefits for future hires. He has called for phasing in changes such as raising retirement ages and reducing benefit accruals for existing employees.

Harris’ letter said that the Attorney General’s Office has taken a dim view of such ideas in the past and that Reed’s proposal would be “an extraordinary maneuver.”

An attorney general’s review doesn’t carry the weight of a court opinion, though it can provide guidance to government leaders. Harris’ office would not speculate what action she might take if San Jose pursues Reed’s proposal.

“I don’t want to get into hypotheticals,” said Shum Preston, a spokesman for Harris’ office.

John Woolfolk is a reporter for the Bay Area News Group, based at The Mercury News. A native of New Orleans, he grew up near San Jose. He is a graduate of the UC Berkeley School of Journalism and has been a journalist since 1990, covering cities, counties, law enforcement, courts and other general news. He also has worked as an editor since 2013.

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